News of the Day

A potential nationwide freight rail strike is looming, threatening to cripple the U.S. economy ahead of the holiday shopping season. Roughly 115,000 rail workers could walk off the job as soon as September 16 if they cannot agree to a new contract with railroads.

Five of the 13 unions representing rail workers have reached tentative agreements with railroads to enact the Presidential Emergency Board (PEB) recommendations, which call for 24 percent pay raises, back pay and cash bonuses.

But the bulk of railroad workers belong to unions that haven’t yet agreed to a deal. It’s also unclear whether workers would vote to ratify PEB recommendations that don’t address their concerns about punishing hours and rigid schedules that make it difficult to take time off for any reason.

“I would suspect that most railroad workers would love to strike, would love to get back at their employers after years of abuse while they watched the industry make record profits,” said Ron Kaminkow, an organizer at Railroad Workers United, which represents rank-and-file railroaders.

Federal law gives Congress the power to block or delay a railroad strike. If workers were to walk out, lawmakers could vote to enact the PEB deal or appoint arbitrators to fast-track a new contract, among a range of other options.

The Association of American Railroads, which estimates that a national rail shutdown would cost the U.S. at least $2 billion a day, said that lawmakers should vote to implement the PEB recommendations in the event of a strike to “instantly reward employees and reduce economic uncertainty.”

Experts say that an extended walkout would devastate industries that rely on freight to transport grain, coal, diesel, steel and motor vehicle parts. Shipping containers would pile up at ports, severely congesting supply chains and sending prices soaring ahead of the holidays.

The Internal Revenue Service mistakenly published confidential data for 120,000 taxpayers on its website before realizing the error and taking down the data, the Treasury Department said.

The IRS accidentally posted data from a tax form used by both individuals and tax-exempt organizations, the Treasury said in a letter to lawmakers on Friday. While information about nonprofit groups is routinely made public, that for individuals is supposed to be kept private. The Treasury said the IRS would contact all individuals affected in the coming weeks.

Yesterday, the nonpartisan Legislative Audit Bureau (LAB) released a limited-scope review of certain broadband expansion grant programs (report 22-11).

The Public Service Commission of Wisconsin (PSC) administers programs that award grants to telecommunication providers that make broadband service available to businesses and residences. In October 2020, the Department of Administration (DOA) allocated $6.2 million in Coronavirus Aid, Relief, and Economic Security (CARES) Act funds to PSC. In July 2021, DOA allocated $103.4 million in American Rescue Plan Act (ARPA) funds to PSC.

Through June 2022, PSC awarded $105.3 million in broadband grants and reimbursed telecommunication providers $7.7 million. PSC awarded 95 grants, including 12 grants with CARES Act funds and 83 grants with ARPA funds.

LAB identified concerns with PSC’s program administration. For example, almost all of the 384 supporting documents that PSC reviewed did not indicate the amounts the providers had actually paid to construct the projects. PSC did not document its efforts to verify that providers had constructed the broadband infrastructure for which the providers were reimbursed. In addition, the guidance of PSC’s commissioners to their staff for reviewing grant applications for the ARPA-funded program did not consistently adhere to the application instructions. For example, the commissioners instructed their staff not to consider 23 grant applications for “middle-mile” projects even though the instructions did not indicate that such projects would not be considered.

“We hear regularly from Wisconsinites who demand broadband access, however without any written procedures, documented verification efforts, or proper cost accounting, it’s still unclear if these dollars are being put to their highest and best use. PSC’s lack of oversight and rewriting of application criteria after applications have been submitted has eroded much of my confidence concerning PSC’s ability to award future broadband expansion grants. As Wisconsin is soon anticipating a lot of federal dollars for broadband expansion, PSC needs to tighten this program up immediately, said Senator Robert Cowles (R-Green Bay).

LAB made 8 recommendations for PSC to improve its administration of broadband expansion grant programs, including by establishing comprehensive written program policies and improving how it reviews and awards grants, reimburses telecommunication providers, and oversees the programs.

“It’s evident, there needs to be a far more accountable process in this program moving forward. Once LAB’s recommendations in this audit report are implemented by PSC, future applicants for broadband expansion grants will have a greater assurance that their projects will be considered appropriately and consistently. I’m frustrated that efforts to improve and better target broadband grants were vetoed by the Governor in the last session, because problems like these could have simply been avoided in the first place,” said Representative John Macco (R-Ledgeview).

The European benchmark index measuring future electricity prices increased to a record $993 per megawatt hour (MWh) on Monday, days after prices in France and Germany surged 25%, according to European Energy Exchange data compiled by Bloomberg. By comparison, the average price of electricity in the U.S. hit $129 per MWh in June, federal data showed.

The energy crisis has forced consumers to cut back on power consumption, industrial production declines and energy rationing across the continent. The European Union Council (EU) scheduled an emergency meeting of EU energy ministers slated for next week in response to the market conditions.

“The skyrocketing electricity prices are now exposing, for different reasons, the limitations of our current electricity market design,” European Commission President Ursula von der Leyen remarked during a speech Monday. “It was developed under completely different circumstances and for completely different purposes. It is no longer fit for purpose.”

Von der Leyen blamed the record price increases on Russia’s invasion of Ukraine which has upended global energy markets but added that the crisis was evidence the bloc needed to transition further to green energy. Russia has throttled natural gas supplies to Europe in response to the EU’s sanction packages introduced following the February invasion.

However, electricity prices in Europe hit all-time highs months before the invasion.

A Reuters analysis published in December concluded that lower-than-expected wind power generation was a major factor sending prices higher and forcing suppliers to turn back to coal and natural gas. Russia was the largest provider of Europe’s natural gas and coal imports at the time of the invasion.

After the U.S. Department of Agriculture found the Nemadji Trail Energy Center (NTEC) in Superior would have no significant impact on the environment, the Environmental Protection Agency stepped in and said the proposed natural gas plant had failed to account for climate change and emissions.

At a time when our state is at risk of rolling blackouts for the first time ever, it is mind-boggling that a federal agency would take steps to delay Wisconsinites’ access to clean, reliable, and affordable energy,” said U.S. Rep. Tom Tiffany (R-7th CD).

Tiffany recently sent EPA Administrator Michael Regan a letter urging him to support the proposed natural gas plant after the agency said a Supplemental Environmental Assessment failed to properly account for carbon emissions. But when the U.S. Department of Agriculture’s Rural Utilities Service conducted the first environmental assessment last year it found the plant would have no significant environmental impact. Judges have agreed.

NTEC is now waiting for direction from the Rural Utilities Service.

As Tiffany notes in his letter, the proposed $700 million natural gas plant would provide affordable and reliable energy to customers across four states – Wisconsin, Minnesota, Illinois, and Iowa. The 625-megawatt plant would be built along the Nemadji River in Superior by both Wisconsin-based Dairyland Power and Duluth-based Minnesota Power. The plant was expected to be in service by 2025. Delays, such as this one, will most likely push the date back.

According to the U.S. Energy Information Administration, natural gas emits about half as much carbon dioxide as coal. Therefore, RUS estimates that the NTEC would reduce emissions by about 964,000 tons annually.

“Energy security is national security, and the NTEC is crucial to providing clean, reliable, and affordable energy to Wisconsin and beyond in an environmentally safe way,” Tiffany said. “It’s time for the EPA to plan for the future by supporting the NTEC plant.”

In its assessment, the EPA determined NTEC would be responsible for $2.15 billion in “climate damages” because of emissions from 2025-2040.

“I find these conclusions deeply troubling and remain concerned that the EPA’s unrelenting effort to delay the approval of this vital project based on unsupported ideological considerations is both unfair and dangerous,” Tiffany wrote in the letter.

Environmentalist groups Clean Wisconsin and the Sierra Club in late June filed an appeal with the Wisconsin Court of Appeals seeking to block the construction of the natural gas facility. They claim the Public Service Commission erroneously granted state approval. A Dane County judge in June upheld the PSC’s decision and its authority.

A Minnesota appeals court earlier this month ruled in favor of the project, stating It is a “more reliable and lower cost source” of energy than equivalent-sized wind or solar power projects.

Yesterday, Governor Tony Evers announced that Wisconsin high school juniors and seniors heading back to school this fall will have 14 new occupational pathways that local employers can support, thanks to ongoing modernization efforts by the Wisconsin Department of Workforce Development (DWD).

Working in collaboration with school consortiums, employers, the Wisconsin Technical College System, and other partners, DWD has modernized the framework for a total of 75 Youth Apprenticeship (YA) program pathways to help industries like construction, health sciences, marketing, science and engineering, and transportation find and develop home-grown talent.

DWD’s YA Program Modernization Initiative resulted in 14 new occupational pathways in which local employers can offer apprenticeship opportunities to students. These include:

• Agriculture, Food, and Natural Resources, new pathways: Arborist and Dairy Grazier.
• Architecture and Construction, new pathways: Gas Distribution Technician, Heavy Equipment Operator/Operating Engineer, and Utilities Electrical Technician.
• Arts, Audio Visual Technology and Communications, new pathway: Media Broadcast Technician.
• Health Science, new pathways: Phlebotomist and Resident Aide.
• Information Technology, new pathway: IT Broadband Technician.
• Manufacturing, new pathway: Electro-mechanical/Mechatronics.
• Transportation, Distribution, and Logistics, new pathways: Airport Operations and Management, Aviation Maintenance Fundamentals, Aviation Airframe and Powerplant Technician, Aviation Avionics Technician.

The YA program is coordinated and provided around the state by consortia that often consist of school districts, technical colleges, and chambers of commerce. Of the 421 public school districts, 321 districts, or 76.2 percent, had students enrolled in YA for the 2021-2022 school year.

Employers interested in becoming a youth apprenticeship sponsor can find more information here.

Federal Reserve Chairman Jerome Powell pledged that he and his colleagues will keep raising interest rates until they’re confident that inflation is under control.

In short and direct remarks Friday at an economic conference in Jackson Hole, Wyo., Powell acknowledged that higher borrowing costs will likely cause some short-term pain for families and businesses.

Unemployment may be higher and the economy may grow more slowly. But Powell warned the alternative — allowing high inflation to continue unchecked — would be worse.

“Without price stability, the economy does not work for anyone,” he said.

“We are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply, and to keep inflation expectations anchored,” Powell said. “We will keep at it until we are confident the job is done.”

State and local employees left their jobs at record highs in 2021, according to a new Wisconsin Policy Forum report.

The study of Wisconsin Retirement System data found 17,646 left the pension system in 2021 for reasons other than retirement, death or disability. At the end of 2021, there were 257,683 active WRS members. That marked the second consecutive year of decline with a net decrease of 0.6 percent from the 259,234 active members at the end of 2019.

The WRS system data include employees ranging from teachers, police officers, prison guards and university employees, to local governments, school districts and state agencies.

The report states increased WRS retirements are partly due to the state’s aging workforce and potentially to challenges brought by the COVID-19 pandemic. The data show 17,646 people left WRS in 2021 for “other separations,” meaning they took another job or became unemployed for other reasons.

The study also found membership in WRS has gotten younger and less experienced, with an average age of 44.6 years old, the youngest average age since 2003. The average employee also had 11.1 years of experience, the lowest amount since 2001.

WPF in the report recommends public officials consider increasing pay and more flexible working conditions, as well as using more new technology and exploring “service sharing arrangements between neighboring governments” and using private contractors.

“Given the state’s aging and shrinking workforce, both the public and private sectors in Wisconsin will continue to face labor challenges,” the report states. “Yet, the importance of positions like police officers, paramedics, and teachers may require a particularly thoughtful and urgent public sector response.”

President Joe Biden announced Wednesday that he will forgive $10,000 in federal student debt for most borrowers and will cancel up to $20,000 for recipients of Pell Grants.

The relief will be limited to Americans earning under $125,000 per year, or $250,000 for married couples or heads of households. The relief is also capped at the amount of a borrower’s outstanding eligible debt.

The president will also extend the payment pause on most federal student loans “one final time” through Dec. 31, 2022, according to the tweet.

President Biden’s decision to move ahead with $10,000 in student debt cancellation for borrowers who earn under $125,000 will cost the federal government around $244 billion, according to higher education expert Mark Kantrowitz. The $20,000 in relief for Pell Grant recipients may add around $120 billion to the government’s costs.

More than 11,500 Wisconsinites provided comments in support of the Enbridge Line 5 Segment Relocation Project according to the final comments posted to the Wisconsin Department of Natural Resources project website. The comments were collected as part of the DNR’s four-month-long public comment period on its Draft Environmental Impact Statement of the Line 5 Wisconsin Segment Relocation project. By contrast, just over 5,300 Wisconsinites opposed the project.

While support for the Line 5 relocation project was overwhelming among Wisconsinites who proudly identified their Wisconsin roots, the vast majority of comments in opposition to the project came from individuals who refused to identify what state, or even country, they were from.

Among those submitting comments in support of the project were over two dozen of the leading organizations in the state representing farmers, small businesses, labor unions and papermakers. Groups the submitted comments in favor of the project included the Wisconsin Corn Growers Association, Wisconsin Propane Gas Association, Wisconsin Building Trades Council, Wisconsin Counties Association, Wisconsin Electric Cooperative Association, Wisconsin Farm Bureau Federation, Wisconsin Independent Businesses, Wisconsin Industrial Energy Group, Wisconsin Laborers’ District Council, Wisconsin Manufacturers and Commerce, Wisconsin Paper Council, Wisconsin Petroleum Marketers & Convenience Store Association, Wisconsin Pipe Trades, Wisconsin Restaurant Association, Wisconsin Soybean Association, Cooperative Network, Dairy Business Alliance, Great Lakes Timber Professionals Association, Building Trades Council of South Central Wisconsin, Construction Business Group, International Union of Operating Engineers Local 139, Midwest Food Processors Association, North Central States Regional Council of Carpenters, Northern Wisconsin Building and Construction Trades Council and Teamsters Local 346.

“The Line 5 relocation project is completely within the State of Wisconsin, to be built by Wisconsin union workers, and will benefit the Wisconsin economy,” said Wisconsin’s International Union of Operating Engineers Local 139 President Terry McGowan. “Wisconsin’s trades men and women are some of the best trained skilled workers on the planet, and I’m glad to see our fellow Wisconsinites understand the importance of not only the jobs this project will bring, but the long-term benefit our state will see from the continued operation of Line 5.”

“While we understand the out-of-state interest in this project, Wisconsin voices should take priority on a project that impacts our state,” Bill Johnson, president of Northwoods based Johnson Timber, stated. “Northern Wisconsin is the natural jewel of our state and I encourage those from California and New York who commented against the project to come visit our state, where Line 5 has safely operated for decades. As a Northwoods property owner with an Enbridge pipeline passing through it, I am proud to support the Line 5 relocation project